Statement of Cash Flows

Title: Statement of Cash Flow Speaker: Christina Chi Cash vs. Accrual Accounting Cash basis accounting Recognizes revenue when cash is received and expenses when cash is paid Beginning cash + cash revenue cash payments = ending cash Accrual basis accounting Recognizes revenue when earned and expenses when incurred Overview of Financial Statements Balance sheet provides a point-in-time Statement of overall financial position of a hotel - snapshot of financial health of a hotel Income Statement Assess hotel s operating performance over a period of time Reports the profitability of a hotel s operating activities Prepared on accrual basis accounting and include noncash revenues & expenses Neither can answer questions regarding cash inf lows and outf lows during an operating period Purpose of Statement of Cash

Preparation of SCF Cash include cash on hand, cash in the bank, and cash equivalents. Cash equivalents are short-term, highly liquid investments, e.g. demand deposits, money market funds, marketable securities, treasury bills, etc. Two methods in reporting operating activities Direct & indirect approach The indirect approach is far more widely used

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